Cowen Sees High 80% Probability of FDA Approval for Insmed Incorporated’s (INSM) NTM Drug

Insmed's lead asset ALIS poses compelling prospects for commercial success in the U.S.

Investors were all cheers last Tuesday as Insmed Incorporated (NASDAQ:INSM) released Phase III CONVERT top-line efficacy and safety data on its lead candidate drug amikacin liposome inhalation suspension (ALIS), sending shares skyrocketing by 119%. The drug, which aims to treat treatment-refractory nontuberculous mycobacterial (NTM), a rare and severe lung disorder, met both primary and secondary endpoints during its crucial or Phase III trial.

Top analyst Ritu Baral of Cowen is very encouraged by the results, emphasizing: “We view today’s results as a highly supportive data set and see a very high (80+%) probability of approval. While secondary endpoint 6MWT did not hit stat sig improvement, we don’t see this as a barrier to approval.” To support her case that ALIS has a highly probable path for approval, the analyst points to three factors: “i) the primary endpoint was easily met and exceeded FDA’s previous 15% margin , ii) functional measures are less well defined in NTM, and iii) secondary endpoints are not critical for sub-part H on primary endpoint success. INSM has already started assembling the NDA package.”

Pinpointing the unmet need in the NTM market and the drug’s high safety and tolerability levels during CONVERT testing, Baral believes, “the drug has a good chance of clinical, regulatory and commercial success in the US.” For instance, the overall dropout was only 16.1% vs. expectations of 25%, while most AEs were successfully treated within two months of treatment.

More importantly, the analyst notes the important shift in INSM’s perception among the investor community, underlining, “Investor discussion this morning immediately moved from approvability (universally regarded as exceedingly high) to ALIS’ market opportunity (price, use paradigm, payor willingness to cover) […] Given CONVERT data met or exceeded our market model assumptions, we reiterate our $77K/yr net annual US price and $1.4B US peak market sales estimate.”

As such, the analyst reiterates an Outperform rating on INSM, while setting the price target to $54.00 representing a near 75% rise over current trading levels.

Ritu Baral has a solid TipRanks score with a 66% success rate and a high ranking of #66 out of 4,633 analysts. Baral realizes 20.7% in her annual returns. When recommending INSM, the analyst posts gains of 72.8%. 

Tipranks analytics reveal INSM as a Strong Buy. Out of 6 analysts polled by TipRanks (in the past 3 months), all are bullish to date. The stock’s consensus price target stands at $34.50, marking a 12% upside from where the stock is currently trading.

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